UPDATE 2-Rogers designs plan to thwart Verizon move into Canada

TORONTO Aug 2 (Reuters) - Rogers Communications Inc
, Canada's largest wireless company, is attempting to
thwart Verizon Communications Inc's entry into the
country by backing a private equity bid for two small carriers
that the U.S. telecom giant wants to acquire.

According to sources familiar with the deal, Rogers wants to
help Toronto-based Birch Hill Equity Partners fund a purchase of
controlling stakes in Wind Mobile and Mobilicity, which entered
the Canadian market less than five years ago.

The plan would complicate a Verizon bid, perhaps pushing the
company to raise its offer price, but industry insiders say that
is far from assured Rogers and Birch Hill would win approval
from the federal government.

Ottawa has repeatedly stressed that it wants to boost
competition and lower wireless bills for consumers, and it has
set rules in recent auctions of wireless airwaves designed to
encourage new carriers to offer services.

Rogers - along with Canada's other major national telecoms
BCE Inc and Telus Corp - argue that Verizon
would unfairly benefit from the policies to stimulate
competition. Those policies include a 2012 easing of
restrictions on foreign ownership for smaller operators.

In keeping with its goals, Ottawa has opposed efforts by the
Big Three to win control of airwaves owned by any recent
entrants, and government policy prevents Rogers from making a
direct big for Wind or Mobilicity.

Rogers, Telus and BCE's Bell currently control 90 percent of
the market and 85 percent of the spectrum.
Continued...